MURRIETA: Salary cuts bring budget down

City Council approves new budget reflecting loss of employees

Employee layoffs, furloughs, forgone training sessions and
reduced payments to health plans for retirees have helped the city
reduce its spending by $2.25 million, city finance officials said
Tuesday as the Murrieta City Council approved a new $36 million
operating budget for this fiscal year.

In addition, council members also approved reducing the Fire
Department's spending plan by $1 million, the library budget by
$324,000 and the Community Services District by $658,000.

The city's new operating budget is $4 million less than what
council members had planned on spending this year.

Top city administrators had originally projected that the city
would bring in a total of about $40 million in revenue, with about
$7 million coming from property taxes and $11.5 million coming in
sales tax.

However, property values in the city have dropped by 17 percent,
and sales taxes have taken a big hit because of residents in the
region holding tightly onto their cash.

They now believe the city will receive $6 million in property
taxes and $10.6 million in sales taxes.

In response, the council members earlier this year approved
various cost-saving measures.

In April, the city laid off 13 full-time employees, city finance
reports state, left unfilled positions vacant, and terminated
contracts with various part-time and temporary workers resulting in
43 positions remaining unfilled. Additionally, remaining employees
have agreed to a 5 percent reduction to their base salaries in the
form of furlough hours, which led to city officials closing City
Hall each Friday.

Those efforts have saved the city $1.27 million, Finance
Director Joy Canfield said.

Other large cuts, approved by council members in April, come
from reducing by $800,000 the advance payments the city had been
making toward health insurance for retired employees, and reducing
by nearly $700,000 the amount forwarded onto the Community Services
District. The city also cut administrative travel, advertising and
employee training, and saved $50,000 by implementing employees'
suggestions for how to save money.

"There's no additional cuts," Canfield said Tuesday evening
during the budget adjustment discussion. "These are all items we
have implemented and now we have to do the clean-up work and
formally adjust."

But expenses have grown also, and the budget now includes
$300,000 to be paid for consulting services, $150,000 of which will
go toward a regionwide animal shelter, a $310,000 payment from the
city Redevelopment Agency for a loan granted in 2009, and $165,000
in unemployment benefits for the workers who were laid off.

Canfield said Murrieta must rely on $1.36 million in contingency
funds that the city began setting aside in 2008, in order to
balance the city's budget at $36 million. The city will not use any
of its reserves, which remain at $9.6 million.

From the fire district, which is funded through property taxes,
the city is expected to save $550,000 by eliminating from the books
the cost of sending Murrieta fire officials to emergencies outside
the city. Those costs are unpredictable, Canfield wrote, and are
typically covered by state and federal grants. Additionally, the
city will make smaller payments to retirees' health plans.

"As we need to respond to fires, we will bring those back to you
based on the actual amount we need," she said.

Additionally, the fire district will save $31,000 in salaries
and benefits due to the recent layoffs and early retirements,
$91,000 in training, maintenance supplies and postponed
improvements to Fire Station 2, $46,000 in internal reductions and
$380,000 by lowering the amount paid toward health benefits for
retirees.

Those cuts will bring the fire district budget down from $13
million to $12 million.

Employee salary and benefit cuts also will help reduce the
library's budget, but those moves also led to the suspension of
special events and children's story hours for the remainder of the
year.

Concessions by library employees will save the city $282,000
this fiscal year, finance reports state. And cutting memberships
with various organizations and contract services will save an
additional $29,000, reducing the overall library budget from $2.4
million to $2.1 million.

Likewise, the Community Services District budget will be reduced
from $10.1 million to $9.45 million by cutting the salaries and
benefits for employees of that department by about $600,000,
reducing overtime, training, contract services and advertising, and
reducing by $55,000 the amount paid toward health benefits for
retirees.